This is really quite remarkable. The Labour Party has effectively admitted that its flagship policy going into the election would have actually made things worse for consumers. When Ed Miliband announced his energy price freeze he was credited with seizing control of the debate and landing a significant strategic blow against the Tories. His bold pledge: “The next Labour government will freeze gas and electricity prices until the start of 2017.”
Yet, since Miliband gave that speech, a fall in wholesale gas prices has led to energy costs for homeowners coming down. Labour’s “freeze” would theoretically have kept prices at their peak, despite the fact the market had brought them down. Consumers would have paid more under Labour.
The party’s press office is spinning hard this afternoon, claiming that what they really meant was that prices would be “capped”, not frozen. But the facts are very clear. Ed Miliband stood up on a stage and vowed to “freeze” prices. As anyone with a dictionary can tell you, a “freeze” means “being held at a fixed level or in a fixed state”.
This story is something of a microcosm for all socialist state interventions in the economy. Labour thought it could make things better by intervening, by regulating, by controlling. Instead, it did not consider the consequences, and the policy would in fact have made things worse. A lesson for socialists, and a feather in the cap of free marketeers.